Microfinance has an increasing demand due to the high interest in poverty alleviation around the world. For profitable micronance institutions (MFIs) however it requires ecient and eective business processes in order to overcome the high costs of microloans and making the MFI sustainable. The efficiency can be achieved through portfolio management and reporting capabilities. Profitability management also enables the organizations to achieve better performance. It can also be obtained through growth measurement, supporting in overcoming high loan processing costs of microloans. In this presentation we summarise the outcome of a research report conducted by MFI Insight Analytics of a survey that was conducted from 295 MFIs in different countries targeting the analytical situation of the management systems used by those MFIs. The survey consisted of 10 questions directed towards the business process factors including credit scoring system, performance tracking of the product offerings and vintage analysis. In addition, write os and recovery monitoring of the MFIs was also studied to be able to analyze the systems. The questions also tried to identify if these organizations were able to recognize opportunities of growth and the penetration ratios.

1. Analytical Software Solutions in
Microfinance Institutions and Banks
Research Report 2015
Sana Himayat
Research and Communications Manager
MFI Insight analytics
Jamal Mbarki
Laboratory of computer science research (LARI), Faculty of Sciences,
Mohamed Ier University,
Oujda, Morocco.
Sidi Yasser El Jasouli
CEO
MFI Insight Analytics
Frederic Lepottier
Business Development Manager
MFI Insight Analytics

2. Table of Content
 Introduction
 Section 1:Microfinance Institutions and Business Intelligence
 Section 2: Research Methodology
 Section 3: Organizational Profiles
 Section4: Results and Discussion
 Conclusion

3. Introduction
Role of analytical solutions in microloan providers
Survey from microfinance institutions
Understanding there business operations and level of ICT automation
Knowing about their interest in the use of Analytical Solution
Role of analytical solutions in organizational sustainability

4. Microfinance Institutions and Business Intelligence
 Microfinance is serving the underserved with smalls loans
 Microfinance is spreading due to the increasing demand and interest towards poverty alleviation
 Business intelligence in such organizations
 Improves performance and operations
 Reduce transactional costs
 Quick decision making through consolidated and concise data
 Reporting and monitoring
 Quick report making
 Makes organizational sustainable

5. Research Methodology
 Research Focus
 The focus of this research is to find
out the use of analytical solutions
for microfinance services.
 Approach
 Quantitative approach
 Survey with 10 closed questions
 Data Collection & Time Frame
 Online Survey from MFIs and Banks
 Follow up phone calls
 Data collection through 4 months
 Survey Design
 Multiple choice questions

6. Participant
Outreach

7. Participant
Outreach

8. Organizational Profiles

9. Organizational Profiles

10. Results and Discussion
1- Do you use analytical solutions?
2- Are you able to track the performance of your products,
branches, loan officers and vintages?

11. Results and Discussion
3: How often are you able to track performance?
4: At what level does your organization track write-offs and
recoveries?

12. Results and Discussion
6: Do you have an accounting, banking and LPM systems?5: Are you able to identify the drivers of your operating
expense?

13. Results and Discussion
8: Is your organization able to measure penetration ratio to
consider potential opportunities for growth?
7: Do you have credit scoring system?

14. Results and Discussion
10: If there was an analytical solution that covered all the
areas of MFI operations listed above, would you purchase it
for your organization?
9: Are you able to provide your donors with reports that
they require about outreach, customer segmentation,
customer satisfaction, retention ratio, etc?

15. Results and Discussion
Analytics Tools- A Part of the MFI Roadmap
 Most organizations have some of of the 3 systems, Accounting System,
LPM System and Banking System
 Analytical solutions support organization to achieve all results by
incorporating the 3 systems, thus improving the performance and
output of the organization.
 LPM system is used by very few of the participating organizations
 LPM system is often directly linked with the accounting system allowing
to reduce the time lag for asset recognition
 Loan portfolio management is an essential part of the system because it
enables to control delinquencies and risks
 It is a key to identifying PAR ( portfolio at Risk) Stages of Delinquency
Source: Microenterprise Access to Banking Services

16. Results and Discussion (continued)
Business Process Efficiency of MFI: Portfolio monitoring capabilities
 Loan tracking systems
 Vintage Tracking
 Monitoring performance of branches and loan officers
 Tracking frequency
 Daily tracking of the performance that is accurate and reliable
 Daily tracking allows the organization to recognize problem areas
immediately and take corrective actions

17. Results and Discussion (continued)
Business Process Efficiency of MFI: Write-off and Recovery tracking
 Write-offs and recoveries portray the true state of the organization
 Analytical solutions track the delinquency cycle and captures valuable
insights in order to create corrective actions
 Enabling the organization to recover their overdue amounts
 There is a decrease in the write-offs level consequently reducing the loss
reserve and have better cash flow management
 tracking the overdue amount at the lowest grain, contract level, enable
the MFI to set efficient recovery process.

18. Results and Discussion (continued)
Business Process Efficiency of MFI: Reporting capability
 Reporting is an important aspect of a loan portfolio
 Success of the organization can be determined by reporting capability towards
donors
 Reporting is a powerful tool to improve the performance of MFIs and its
transparency
 Analytical solutions enable the organizations to provide the donors with reports
 Various Reports :
Loan Portfolio Data Quality
Revenue, Growth and Performance
Quality based on Client, Business and Characteristics
Loan collection (PAR)
Financial sustainability (adjusted return on assets)
Client poverty levels
The amount of funds used
The amount of loans that were made

19. Results and Discussion (continued)
Business Process Efficiency of MFI: Level of ICT Automation
 Organizations need ICT automation to run their business process successfully with analytical solutions
 Different organizational maturity stages depending on level of ICT automation and features of tools used
Organizational Maturity Depending on ICT Automation Level
Maturity Level 1 & 2

20. Conclusion
 Organizations that are using analytical solutions are at maturity level 3 of the industry
 Microfinance organizations are willing to install this new system, thus creating a demand for analytical technology
in the industry.
 Business intelligence has an impact on the performance of MFIs and banks and it plays a significant role in poverty
alleviation through MFI sustainability.
 Analytical solutions improves organizational performance, accuracy an reduces errors
 Analytical solutions enables better reporting allowing for improved decision making
 It plays a significant role in performance of MFIs and its sustainability
 Analytical solutions indirectly leads to poverty alleviation

21. Conclusion
 Features of analytical software solutions that organizations adopt gradually leading to better
performance of organization and its sustainability.

22. Research carried out by MFI Insight Analytics
The complete publication can be found on our website.
www.mfianalytics.com
Email: info@mfianalytics.com
Or
http://issuu.com/mfianalytics/docs/report_dec_2015